Foreign currency prices change constantly, a feature that allows Forex traders to enter the market at any time of the day or night and take advantage of these changes to make a profit as the prices change, one against the other. As some countries begin their sessions others are finishing and this continues somewhere in the world day after day.
It is not difficult to determine when you should enter the market, as all you need do is to look for when the number of transactions are at their busiest in any particular forex market. To do this effectively however you will need to know three important things, these being:
- There are good times to trade and bad times to trade but if you choose right you can gain an enhanced financial benefit. This is why you should not trade throughout the day but do so intermittently, when each market is at its peak.
- By being there as each market is at its busiest, however, you will need to keep your finger on the pulse throughout the night in Australia as Australian time is around 14 hours earlier than Eastern Standard Time (USA).
- Concentrate on the three biggest markets, which are Tokyo, London and New York.
In reality however Forex trading is busiest when the markets of New York and London overlap. This means that a big proportion of New York currency trading takes place as that market is stirring for the day while the London trading is still active. Another surge in currency trading takes place when the Asian market, which includes: Japan, China, Australia and New Zealand, begins business and even more so when they are all busy simultaneously.
Starting with the largest market of New York trading at its busiest between 8am and 4pm (EST-USA), the London market would at its height between 2am and 12 noon (EST), Tokyo – 8 pm to 4am (EST) and Australia 7pm to 3am (EST). This gives you two windows of opportunity for the best trading times, from 2am to 4am EST for the Asian-Europe market and 8am to 12pm EST for the Europe/US markets.
While the Forex market is open for 24 hours a day, every day it is not always busy but you can make money when the currency of a country rises as well as when it falls. You won’t make any money if a currency remains static.
Vanessa writes about where to find the forex trading broker online and writes for Forex Trading Finder where you can compare foreign exchange brokers to get the best forex reviews.